Correlation Between Kiromic Biopharma and Regen BioPharma

Can any of the company-specific risk be diversified away by investing in both Kiromic Biopharma and Regen BioPharma at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kiromic Biopharma and Regen BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kiromic Biopharma and Regen BioPharma, you can compare the effects of market volatilities on Kiromic Biopharma and Regen BioPharma and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kiromic Biopharma with a short position of Regen BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiromic Biopharma and Regen BioPharma.

Diversification Opportunities for Kiromic Biopharma and Regen BioPharma

0.49

Correlation Coefficient

Kiromic Biopharma  Regen BioPharma

Very weak diversification

The 3 months correlation between Kiromic and Regen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kiromic Biopharma and Regen BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regen BioPharma and Kiromic Biopharma is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kiromic Biopharma are associated (or correlated) with Regen BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regen BioPharma has no effect on the direction of Kiromic Biopharma i.e., Kiromic Biopharma and Regen BioPharma go up and down completely randomly.

Pair Corralation between Kiromic Biopharma and Regen BioPharma

If you would invest  16.00  in Regen BioPharma on October 25, 2024 and sell it today you would lose (8.13) from holding Regen BioPharma or give up 50.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

Kiromic Biopharma  vs.  Regen BioPharma

Kiromic Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kiromic Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Kiromic Biopharma is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Regen BioPharma

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental drivers, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kiromic Biopharma and Regen BioPharma

The main advantage of trading using opposite Kiromic Biopharma and Regen BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiromic Biopharma position performs unexpectedly, Regen BioPharma can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Regen BioPharma will offset losses from the drop in Regen BioPharma's long position.

The idea behind Kiromic Biopharma and Regen BioPharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.